To help readers better understand the nuances of foreign policy, CFR staff writers and Consulting Editor Bernard Gwertzman conduct in-depth interviews with a wide range of international experts, as well as newsmakers.

Elizabeth Economy, the Council’s director of Asia Studies, called Hu Jintao, just elected general secretary of the Chinese Communist Party, a potential political reformer—noting that “there may be something interesting lurking underneath his rather staid and opaque exterior.” She also hailed the post-9/11 era as a golden age in Sino-American relations. But Economy warns that the Communist Party could ultimately perish unless it can clamp down on corruption, advance the rule of law, and reform both the political and economic system.

Economy, who is also C.V. Starr senior fellow at the Council, made these comments in an interview with Bernard Gwertzman, consulting editor for the Council’s website, cfr.org, on November 15, 2002.

Q. We all woke up this morning to news reports that Hu Jintao is now the general secretary of the Chinese Community Party and is slated to becomeChina’s new president early next year. For me—and I expect almost all Americans, except for the coterie of Chinese experts—nobody knows who Mr. Hu is. So who is Mr. Hu?

A. Hu Jintao has had a fairly spectacular rise to power. He was a top student at Qinghua University, which is sort of the Chinese MIT or Caltech. He was also the youngest member of the Central Committee when he was first elected at age 39. Somewhat unusually, he earned his stripes as a leader in some of China’s poorest provinces and autonomous regions, including Guizhou, Tibet, and Gansu. Supposedly, though, he didn’t much like Tibet and asked for a transfer due to health reasons. It’s very difficult to pin Hu down in terms of his political leanings. He was a protege of both Deng Xiaoping and Hu Yaobang, one of the most politically reform-minded leaders in recent Chinese history, yet he also apparently had no hesitation cracking down on protestors in Tibet. More recently, Hu has been in charge of the Party School, which has been the locus of much of the most interesting debate and research on political reform in China. So while a lot of people don’t hold out much hope that Hu is going to lead the charge for political reform in China, I think there may be something interesting lurking underneath his rather staid and opaque exterior.

Q. Is it true that the outgoing party secretary, Jiang Zemin, who will be president for a few more months, really wanted to stay in power? Or is that just speculation?

A. I think it was largely speculation. I think that what is most important to Jiang at this point is to ensure that his legacy remains a positive one. In fact, he does still wield some power. He has followed in Deng Xiaoping’s shoes, retaining control of the Central Military Commission. So that gives Jiang a post behind the scenes to exercise some authority. He is not gone from the scene, and in fact, many of the people who have been named to the Politburo are Jiang Zemin’s allies or proteges.

Q. Is Hu a protege also?

A. No, Hu is a protege of Deng Xiaoping and Hu Yaobang.

Q. There’s a lot of talk about Zeng Qinghong. Who is he?

A. Zeng Qinghong has been referred to as Jiang Zemin’s henchman. Until he started working with Jiang in the mid-1980s, he really had not distinguished himself in any significant way. He really has exercised behind-the-scenes power only by virtue of being Jiang Zemin’s right-hand man. It is not clear he has any independent power base.

Q. Let’s get away from the “Kremlinological” discussion and into what China’s like now. What are the guiding policies ofChina today?

A. That speaks to Jiang’s legacy. Where has he taken China over the past decade or more? I think three things have emerged fairly clearly from his tenure. In terms of domestic policy, the central concern of the Chinese leadership has been to advance economic reform and maintain social stability. On both fronts, the regime has been remarkably successful. The economy has been growing consistently at a rate of 7-8 percent annually. China is one of the largest trading powers in the world and will probably surpass the United States as the largest recipient of foreign direct investment this year or next. In addition, China now boasts a burgeoning entrepreneurial class that the party is eager to co-opt. On the other hand, we have seen very little progress on the political-reform front. In terms of central, party-directed reform, we are no further than we were in 1989, when Jiang came to power.

In terms of foreign policy, Jiang has been perhaps a little more bold and has taken a few more risks. The mainstay of his policy has been, first, to advance relations with the United States, and second, to make China a major player on the world stage. Sometimes he has pursued this at considerable risk to his own popularity. He took a lot of hits for being soft on the U.S. in the wake of the Belgrade embassy bombing and the EP3 [spy plane] incident. People saw him as kowtowing to the U.S., and he was urged by many to take a much tougher line.

Q. Are relations with theUnited Statesnow conditioned in part by the anti-terrorism policy?

A. In the last six months or so, there has been a dramatic improvement in Sino-American relations. In part, this has been due to China’s effort, but I think the real shift has been in U.S. policy toward China. I attribute this entirely to the war on terrorism, plans to invade Iraq, and the necessity of Chinese support for both. Frankly, I think our China policy moved 180 degrees when the White House started sending messages to the Pentagon to begin developing war plans for Iraq last spring.

You have an administration that came into power talking of China as the next greatest threat to U.S. power. Now, clearly there has been this revolution in U.S. thinking, from considering “rising” states as the greatest threat to believing that failed states pose the greatest threat. So, when Hu Jintao came to the U.S. last spring, you had uniformly positive rhetoric surrounding his visit. You had a Pentagon, which up until that time had been completely opposed to military-to-military contacts, start talking about reengaging in the military-to-military context. You had administration officials saying that Hu is a man that we can do business with. All of a sudden, all the negative rhetoric about China disappeared, and you had a new administration policy characterized by the three C’s: candid, cooperative, and constructive. Then the United States labeled the East Turkestan Independence Movement a terrorist group, something that China had long desired. Now the Chinese leadership thinks it has the blessing of the United States to crack down on the Uighur separatists in Xinjiang—who may or may not be terrorists—with impunity. That was a very significant moment for Jiang. You also had President Bush invite Jiang Zemin to Crawford, Texas—something that has been reserved only for the most important world leaders. This invitation justified all of Jiang’s pro-U.S. bent and would have been impossible to conceive of before September 11.

Q. Have the Chinese cracked down on software pirating?

A. Software piracy is really part of a bigger problem in China: how does China implement its international agreements? Part of Jiang’s legacy, certainly, has been the vaulting of China to major-player status on the world stage. The accession to the World Trade Organization, hosting APEC [the Asia-Pacific Economic Cooperation forum], and hosting the Olympics in 2008 have all confirmed China’s status as a world leader. Still, the hard work is yet to be done. There are going to be problems with the WTO implementation, and actually, there are already a lot of challenges. Intellectual-property-rights protection, which speaks to software pirating, has not improved significantly over the past decade. Although the central government is committed to doing a better job in this regard, local officials have little incentive to take action.

Q. With all the Jiang supporters around, will it take Hu forever to get his own team together?

A. My favorite example is Gorbachev; no one who knew his background would ever have predicted that he would have precipitated the full-scale political and economic reform of the Soviet Union. You never know what will emerge from this kind of leadership, in which debates are almost exclusively private, so it’s very difficult to know where the battle lines might be drawn. We may be very surprised at what comes out of this new team. Some in the leadership are believed to be fairly reform-minded, such as Wen Jiabao; perhaps a coalition will develop around Hu Jintao and Wen Jiabao for further political reform. Again, I go back to the fact Hu Jintao has been head of the Party School, which has been the locus of the most interesting and innovative thinking about political reform in China. In other respects, there is probably significant consensus within the leadership already to continue on the current path of economic reform and a proactive foreign policy.

Q. How do great unemployment and growth coexist inChina?

A. Unemployment in China is significant and growing. Estimates range from 7-10 percent; WTO accession will take the figure to 15 percent over the next five years. The banking system is in a crisis, social unrest is everywhere, and the pension system is nonexistent. At the same time, you have a dynamic economy growing at official rates of 7-8 percent (although many Western economists put the figure closer to 4-5 percent), the second-largest foreign-currency reserves in the world, and a country that is an immense sink for foreign investment. They coexist because different parts of Chinese society are affected in dramatically different ways. Farmers, laid-off state-owned enterprise workers, and in many cases migrant workers are the big losers in the economic reform process. College graduates with technical skills, entrepreneurs, and even enterprising university professors are some of the winners. I think that the most important point concerning economic reform and unemployment or social unrest was made by the exiled Chinese labor leader Han Dongfang, who said basically that protesting workers understand that with globalization and economic reform there will be layoffs. They expect that. What they are protesting is the corruption and injustice that occurs when local officials and enterprise leaders abscond with their pensions or unemployment benefits and leave them with nothing. And when you have injustice, that is when you have revolution.

Thus far, the leadership has been able to respond to all the protests in an individual fashion, like putting out fires. I could envisage a scenario, however, where there would be numerous labor or peasant protests across the country, perhaps linked by the Internet, which would pose a far greater systemic challenge to the leadership. In this regard, I think that the real challenge for the Chinese Communist Party is to clean up the system, advance the rule of law, and improve transparency in both the political and economic system. Without such changes, I don’t think that the party will survive for the long haul.

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